2006-07-22 15:29:03 · 7 answers · asked by ruben c 1 in Business & Finance ➔ Investing
A great book I recommend to all young investors is:
The Teenage Investor: How to Start Early, Invest Often and Build Wealth.
Here's the link on Amazon.com:
http://www.amazon.com/gp/product/0071416633/ref=pd_rvi_gw_3/104-2673501-4245565?%5Fencoding=UTF8&v=glance&n=283155
2006-07-22 17:43:45 · answer #1 · answered by TakingStock 3 · 0⤊ 0⤋
That is a question that every investor must decide in. If you are interested in safe and secure but smaller returns, then invest in Bonds. They are like a loan that you give to a company with promised interest return at a specific time in the future. If you are savy, you can find them with 10% interest, but most of the time it is around 2-4%.
Stocks can be much more lucrative, but are more risky. There are funds that you can invest in. Funds are when you give your money to an investment company, and they invest in stocks from companies that they think are going to do well. If it is a good investment company, then the average ROI (Return on Investment) is usually around 10-12%. They are fairly safe, as long as you invest with a reputable investment company - they are not as likely to invest in bad or overly risky choices.
Then there are individual stocks, the most lucrative, but also the most risky. To use some recent examples. If you bought stock in GM Automotive around January of this year, you could have bought it for $20 - the lowest its been since it went public (in inflation adjusted dollars) because the company was posting record losses. Now that it is making changes their stock is worth around $27 - that is a 35% ROI in 7 months. Another is Delta Airlines, they were going through bankruptcy and strikes by employees in mid March. Their stock has almost doubled by the end of March because they settled the strikes and they were starting to benefit from holiday travel and gas prices - that is almost 200% ROI in 15 days (if you put in $1000 you would get $2000 back, minus transaction fees).
Now, an example of why this is also the riskiest thing to do. If you bought Yahoo stock during the height of the dot com boom in 2000, you would have had to pay $100 per share. After the dot com frenzy subsided, the stocks dropped dramatically. Late 2001 their shares dropped to as low as $20. That is a -500% loss on your investment. If you put in $1000, you would be left with $200 dollars.
The bottom line is if you are going to invest in your own choice of stocks, you have to do the research, be vigilant, don't go along with the crowd because they aren't always right, and be willing to wins some and lose some.
2006-07-22 22:48:08 · answer #2 · answered by Christopher B 6 · 0⤊ 0⤋
Open a roth IRA while you are still a novice investor. Once you acquire a little more knowledge then go into the stocks. You'll want to keep the roth anyways, so its a good choice.
2006-07-22 23:53:28 · answer #3 · answered by RMC 2 · 0⤊ 0⤋
Start a mutual fund, get the reports, see the stocks they are invested in...then one day branch off into buying individual stocks...that's how I got started.
2006-07-22 22:43:13 · answer #4 · answered by Nick C 3 · 0⤊ 0⤋
Mutual funds. I like the "Sin Fund". It diversifies in gambling intrests, cigarette manufacturers and makers of beer, wine, and spirits.
When times are good, people gamble, smoke and drink.
When times are bad, people gamble, smoke and drink.
It's a win-win investment.
2006-07-22 22:34:09 · answer #5 · answered by damndirtyape212 5 · 0⤊ 0⤋
must be over 18. have your mom or dad open an account with td ameritrade or scott trading. you will be able to trade over the net.
2006-07-22 22:32:59 · answer #6 · answered by Anonymous · 0⤊ 0⤋
I found lots of good information here.
2006-07-23 02:41:31 · answer #7 · answered by Anonymous · 0⤊ 0⤋